Partial Interest Valuation

Property ownership is rarely cut-and-dried. In a simple world, John Doe owns a property outright, by himself, unencumbered by liens or mortgages, leases or easements. A more frequent scenario, though, is that he also own it as a joint tenant with his wife, Mrs. Doe. The Jones’ may lease some of the property to another party. They may have also agreed to give up any subsurface or mineral rights they have on the property in exchange for cash. There may be a restriction in the Does’ deed, stipulating that the property must never contain a structure more than two stories in height. We could keep going, but we think you get the idea. There are a hundreds of ways the full “bundle” of rights to a parcel of property can be divided.

Anything less than full ownership—called fee simple in deeds and conveyances—by a single person or entity is known as partial interest. Partial interest valuations require experience and a keen understanding of ownership distribution, and here at Reachable Appraisal Services, it’s one of our specialties.

When do I need a partial interest valuation?

In divorce or dissolution of a partnership proceedings, you might need to fairly value one party’s interest in real property. Sometimes, particularly in partnership situations, it’s not simply a matter of appraising the entire property and dividing it evenly by the number of owners. An appraiser can help you determine the value of the property you own, and can ensure you aren’t slighted when the property is divided.

You might need the value of rents or leases on a property, but not the underlying value of the real estate. This is more complicated than it sounds, and isn’t just a matter of how much a tenant is currently paying. For instance, if a tenant is paying below market value, they might be able to sublet at a profit. On the other hand, if they’re paying over market value, their likelihood of moving on when the lease term is up increases. A professional, well trained appraiser will examine rents in the market to determine fair market value of rents or leases, ensuring you get the most out of your tenants.

These are just a couple of PIV scenarios where an appraisal can serve as a boon to you. If you have any questions about PIV or think that you may need PIV-related services or advice, please feel free to contact us today!Our Pricing